Mental Game

I recently finished reading Sam Sheridan's excellent book The Fighter's Mind. Sam does a tremendous job explaining the psyche of a professional fighter, and what makes some of the leading athletes tick.

I've long been a proponent of mental game and mental toughness, and having been a competitive sportsman most of my life, as well as a competitive fighter, this book struck some real chords. However, I've believed for many years that there is a strong link between sports and performance psychology, and standout achievement in other fields, including business.

SMB Capital Partner Mike Bellafiore writes in his outstanding book, One Good Trade, that as traders we should aspire and work constantly towards becoming elite performers. Trader psychology is critical pillar of any successful trader's development, and many outstanding resources abound for traders, notably Dr Brett Steenbarger's many excellent books.

There is much overlap between the lessons that a good trader should learn, and between those anyone else aspiring for elite performance in their field should learn. Mike Bellafiore often refers to such resources on his blog.

I found The Fighter's Mind to contain a lot lessons that while targeted at fighters, seem almost tailor-made for traders. After all, trading is a zero-sum game, where the money we take out of the markets must be taken from the pcoket of someone else...

Many of the lessons resonated with me, with chapter after chapter making me nod and smile grimly. The book covers gems such as:

• The value of hard work, grind and commitment, and an almost overbearing intensity and will to dominate that was personified and taught by Dan Gable, one of the all-time greats - being a consistently profitable trader takes tons of work, grind and commitment...
• Freddie Roach's stress on dedication, the ability to learn and listen, and to grind it out for years. In addition, the criticality of adapting a fighter's game to to his character, just as a trader should choose a style that fits them. Finally, the huge importance of psychology and mental preparation
• The importance of doing the basics, understanding the essential tools, the groundwork...having put the work in at the gym, so that when you're competing, you don't need to be thinking about the basics, you're reacting and firing...as you should be in the markets, with your work done beforehand
• A wonderful piece on Mark DellaGrotte on coaching and personal attention, and creating a community and family of proud fighters in the gym. The value of removing pressure, feeling as if you have nothing to lose to fight without emotion, and take pride and respect in your art. This will push you to perform, in trading, as in fighting
• Ricardo Liborio, arguably one of the top Brazilian Jiu-Jitsu fighters, speaking of the importance of understanding that you can and will lose, and being open minded and flexible enough to deal with that and adapt and learn from the losses. Being honest and humble enough to learn from others. Without this mindset as a trader, you're dead in the water..
• Eddie Bravo and Frank Shamrock speak on controlling ego - taking your ego into the trading room with you and attaching it to positions is begging to decimate your trading account
• One of the sections I really loved was on Marcelo Garcia and his absolute love for the game (BJJ) - what makes him better than most competitors is his passion for and dedication to the sport, and his constant learning and evolution - others adjust to what he *was* doing, when he's onto all new techniques already. Bella covered this in One Good Trade, where he wrote about thinking about trading, speaking about trading, reading and learning about trading to be a good trader...you are what you do..
• There are so many lessons to be taken from Marcelo...another that was pertinent was when he speaks of competitors who try to beat him at his own game...every trader has a unique style that they work and trade, and often they become great at it. Trying to beat someone at their own style, if it's not your natural style will get you killed on the mat, in the cage, and in the market
• Getting the snot kicked out of you was a necessary integration into the legendary Pat Miletich's camp. It breeds toughness, and roots out those that really *want* to be there, because they keep coming back after getting knocked down. The market will knock you down and kick you in the teeth a few times when you least expect it, and you need to be tough enough to take the lessons and come back fighting..
• We also learn the value of flexibility and agility from the lessons learned by fighter Rory Markham in needing to work his ground game, even though he was a hardened stand up striker. Bella again speaks of the need for agility and multiple approaches, because there are market periods when momentum strategies might kill it, but then stop working and we need to adjust our game
• Virgil Hunter and his Olympic gold medalist fighter Andre Ward also have a multitude to teach, but I enjoyed the approach Virgil took to training Andre to not get hit, for months before he taught him to start hitting back. We need to focus on cutting our losses as traders, and managing and protecting our capital before we start to think about big wins and profitability.
• Again, legendary fighter Randy Couture speaks of being the underdog, and how this removes the pressure from fighting, and allows him to focus on his game. We need to be as level-headed as possible when trading...trading with emotion is almost always detrimental. The same is true of bad calls from refs - get through it and get over it, it happens. It's easy to blame the market for being "unfair", blame the algos, blame HFT...accept it, and work around it.
• Randy also highlights an important aspect of the value of positive talk as opposed to negative talk - instead of saying things like "don't get taken down" use positive talk like "stay in his face" - the mind is a finicky thing, and small mental cues like this to refocus ourselves can make a world of difference
• Sam Sheridan also covers other elite athletes beyond pure fighters. The chapter on ultra-marathon runner David Horton is fascinating, and covers the mentality of athletes such as this who push themselves beyond what is believed feasible...sometimes even pushing through physical injury and running on, until the injury heals itself. We can learn valuable lessons in resilience as traders and pushing through dips and losing streaks with the right groundwork, mental attitude and coaching. Also, Horton stresses the value of hard work again, believing that overtraining is a myth. This is backed up in the trading world by Bella's teaching about constant learning, working, reviewing tape of your trades, putting in the time to be a winner
• From Kenny Florian we glean the value of coming back from two hard hitting, grinding losses, learning from these losses, and consistent and dedicated improvement. Another recurring theme, sometimes the rips will come when we trade, and sometimes we need pain and adversity to learn and correct our mistakes. The road to consistent profitability is not a short journey
• We also learn the value of intensity, and an intense approach to your craft from Kenny. When you step into the ring, it's life or death, kill or be killed. In the markets, you're often trading against smarter, better capitalized, better resourced competitors, trying to take your money, as Bella points out. You need to have the focus and intensity to compete on this level to win, but devoid of anger or other emotion
• Another incredibly illuminating chapter was Sam's discussion with chess prodigy Josh Waitzkin of Searching for Bobby Fischer fame. Josh is the author of the absolutely excellent The Art of Learning, and several over great resources. Josh is also a top competitor in Tai Chi, and now, Brazilian Jiu Jitsu. If that's not an example of cross-discipline excellence, then I don't know what is. What I loved from this section of the book was Josh pointing out that great chess players, as well as great Jiu-Jistu fighters and Tai Chi practitioners, do not think ten moves ahead as we might suspect. Instead, they *know where to look* and they recognize patterns faster, thus giving the appearance of knowing what's coming next. This is critically important for traders - we recognize patters over and over, we do not predict markets. Knowing where to look, and recognizing patters faster positions us better for success
• Trainer Greg Jackson points out the value of learning to function under pain, stress and duress. Once you've been through it a few times, it becomes easier to think, react and adjust under such conditions if things are familiar and we've been there before. This is why trading time is key, because unsuspected surprises will come as us, and once we've learned to function under this pressure, our trading will improve
• Renzo Gracie talks about not quitting, about fighting through, in his case, even a dislocated shoulder, because he refused to tap. Once more, competitiveness, resilience and mental toughness are key, in fighting, as in trading

The book has so much more value than I can cover in these few points and this blog post, without making it an unruly posting. This book is essential reading for the professional development of *anybody* striving for elite performance in their field - most definitely applicable to fighters and athletes, but also very much so to business and trading. 

Read it, learn it, and up your game - I just did :) 

Two great quotes on change

The important thing is this: To be able at any moment to sacrifice what we are for what we could become.
-- Charles Dubois


It takes a lot of courage to release the familiar and seemingly secure, to embrace the new. But there is no real security in what is no longer meaningful. There is more security in the adventurous and exciting, for in movement there is life, and in change there is power.
--Alan Cohen


Lots of change ahead for me..really excited about it!!

Thoughts on culture - no, not yoghurt..

With uncanny timing, yesterday @justinspratt tweeted a link to some quotes from Reed Hastings, Netflix's CEO, on how your company should be a pro sports team, not a family.

Yesterday at breakfast, this very same point was raised in a discussion that @xsyn @afekz and I had, and it's a point that @haroonmeer brought up quite some time ago. I whole-heartedly agree with this, of course with the proviso that @xsyn raised - "it depends on what you want to achieve" - but in my context and for my purposes, building and leading a team of rock-star pentesters, I think Reed is spot on.

I believe that this is an element of the larger question of culture however, very much in the same way that my rant on mediocrity is in itself related to culture. Culture is a slippery subject, hotly debated, and once again, some exceptional literature exists to address the many perspectives. For just one great example, I'd strongly recommend Lisa Endlich's Goldman Sachs: The Culture of Success.

It's also an area where the essence is very widely misinterpreted and misunderstood. @haroonmeer's post on Cargo Cult Startups addresses many of these common failings head-on and makes some excellent points that I won't reiterate here. But 20% time and colorful beanbags definitely do not dictate a super culture.

I've been fortunate to see many different environments, both places where I've worked and client environments where I've spent time, and I've seen cultures that work brilliantly, that fail miserably, and that have evolved (or devolved, for a more accurate term) over time. Given the impact that people have, leadership, staffing and hiring play a critical role.

The key to a successful (or conversely, a disastrous) culture is the people within the organization. It should go without saying that leadership is the benchmark, and that people fresh into your environment will take their lead from the prevailing guard. Clearly, if your issue lies here, there is little hope. However beyond the obvious, it extends much deeper - I'd contend that each and every person that you introduce into your environment impacts the culture, and thus the performance of the rest, in various tangible and intangible ways.

It's been said again and again that A-players will aim to hire other A-players. This makes perfect sense, and aligns neatly with a very valid point that @craigbalding raised earlier in response to my mediocrity rant "the ultimate is to surround yourself with people that make you raise your game IMHO". Absolutely spot-on.

Of course, this also plays perfectly into the pro-team/family analogy - you can't pick your family and you should love them unconditionally, but you sure as hell do pick your starting line-up, and shouldn't tolerate less than their best. 

In fact, if someone makes your team, they should be there because they want to be pushed, they want to excel, they want the privilege of playing with other super-stars. They want to be led by a coach and play on a team that they know will push them to achieve their best, measure them harshly but fairly, and that they can constantly learn from. In this way, they continuously improve, and they know that each time they run onto the field, they're surrounded by the cream of the crop and they all worked their proverbial asses off to be there.

The problem comes in when you have B or C players making hiring decisions. Often they're afraid to hire people better than them, or that will challenge them. And the flip-side holds true - A-players don't *want* to work for people who won't challenge or push them. This is an easy trap to fall into however, as often external pressures exist to cut back on the time taken for the hiring process in order to plug an immediate gap, and you settle for "ok". 

In fact, if you want to take this further, consider this in the context of the military - take a small special forces team. Do you want your life in the hands of people who are just ok at what they do? Or do you want to be scared to the back teeth, in hostile territory with someone who worked just as hard, if not harder than you to be there, and who is much better than you at what you do? Maybe a little extreme, but true..

People much smarter than me have proffered a wonderful analogy for this - consider your company, or your team to be a gene-pool. Once you corrupt that gene-pool, even just once, the damage is irrevocable.  This holds true even when, in fact more-so when you have a team of high performers. 

There are many reasons for this, but to highlight some of the obvious ones, the hire of someone mediocre introduces a myriad of doubts. Is my performance in line with this guy, is that what they think? I had to work this hard to get into this team, is this what the standard is now? What's happening here, this guy can't cut it, do we need to carry him now? Is this guy going to represent my team/brand/me publicly? What's up with the guys making the decisions, are they losing it? Are we happy to settle for second best? Are we starting to slip into mediocrity?

Call it what you will, and cite whatever reasons you will - game theory's Prisoner's Dilemma, group dynamics, whatever - even your best, most committed, most loyal players will start to question in this manner when standards are lowered and lower standards are tolerated. Even worse is not acting on this decisively and visibly, and cutting the under-performing player or employee. Because that sends the message that mediocrity is not only tolerated, in some cases it is rewarded. 

Now, everybody makes mistakes, and we've all likely been guilty of a less than stellar hire - the key is to act decisively and quickly to rectify the problem and thus protect your team and your culture. This might sound harsh, admittedly, but if the comfortable status quo was the norm, where would we be? 

And I'm not being purely negative and cynical - a positive hire, a strong A-player who brings the qualities that you value to your team has the opposite, powerfully positive effect. This inspires and motivates the other players to work harder and improve their own performance to keep up with the new blood, and to honor their excellence. People motivate one another strongly, whether positively or negatively.

The truth is that the *people* dictate and maintain the culture. And people are loyal to other people, not to the team, to the company, or to the division. People aspire to play and work with the rock-stars and the big names -  regardless of where they are. That's why players follow coaches, why entire divisions of companies up and leave and start new ones together, why staff follow great leaders wherever they may go.

The bottom-line is to understand the finer elements of culture. This is ridiculously difficult work for leaders, however it is crucial that they understand and endeavor to work to keep the rock-stars who attract other rock-stars. To work to not compromise on your standards, ever. To work to keep pushing, innovating, growing no matter how good you are. And to always remember that no organization is bigger than its people..

Mediocrity Rant

There is a ton of argument and debate all over the place at the moment on whether humanity is collectively getting stupider and/or lazier. This is paradoxical, as collectively we have arguably the most real-time access to information, tools and skills that we have ever had historically. However the arguments undoubtedly resonate..

What is frustrating however, is that there is an ever-increasing prevalence of incredibly smart, motivated, hard-working people, with game-changing ideas and exceptional work-ethic, who are producing amazing things that we all take for granted. I see this even in my own small circles. The barrier to entry for such people has also been pretty much obliterated by the Internet, as highlighted by Seth Godin in his awesome book Linchpin. 

I'd contend that we are much more prone to, and perhaps worse, *comfortable* with, mediocrity. Things get cheaper and more accessible, so if they aren't ideal, well, it's not so bad, is it? We have a mass of options for the same thing, from multiple providers, so hey, if a few of them suck, well where is the major harm? You have a contract to deliver something, why exceed expectations? Why not just deliver as promised? That's the expectation, isn't it?

It is an insidious disease - once it starts to rear it's ugly head and creep in a little, we tend to get more comfortable, and make more and more allowance for it. Give it a little..and it takes everything. It's also really difficult to eradicate it once it's set in..the obligatory cliche - prevention is better than cure. This falls pretty squarely into the lap of today's leadership, who should be shot for allowing it, but more so, with each and every one of us. 

We should be teaching our kids that average is not good enough, our students that a pass mark doesn't cut it, our employees that delivering just what the client, your colleagues or your boss expect is the path to disaster. "Good enough" should not exist, and each time we are just doing enough to get by, we should feel dirty.

Granted, not everybody can be exceptional - that's an impossibility all on it's own. But how much better a place would the world be if everyone was constantly trying to be..?

Why funemployment, and a detour into the curse of prioritization..

A lot of people have been asking me what I'm doing with myself, what my plans are and similar variations on "so you're doing..nothing?".  I did also mention that I'd blog my reasons for going this route and what I'm doing now, so, in the timeless words of the Chemical Brothers - "heeeeere we go"..

First off - I cannot steal another man's excellent term, I'm merely borrowing it. :> Dino Dai Zovi came up with "funemployment", and I've..hmm..*adopted* it for my own purposes..I think it sums the concept up perfectly, as opposed to just saying "Well, I'm kinda doing this, a little of that, some of this.." which in essence leads people to think "mmmkay, so you're doing nothing"..

Essentially, my reasoning is as follows - I've been working non-stop since I was 16..part-time then, and full-time since I was 18. No college in between, just flat-out work for 11 years. While I love what I do, I've never had a chance to think about things, to explore some of my other interests, and to really work on the things that I *want* to work on.

The promise that's sold to us as we grow up is that the more experience you get, the more senior you get, whatever..the more time you have to do these things. Riiiight. Anyone who has been there knows that this is not the case - in fact you end up with less time. And even if it is somewhat feasible and you have more time by some miracle (lucky you), you bump into one major stumbling block - the curse of prioritization.

Allow me to take a quick detour here - I'm not going to go into reasons of motivation, outperformance, mastery etc. There are many excellent resources on these, that I'd just do no justice to. Suffice to say that to become great at something takes a lot more dedicated, focused work than you can manage in your day job. If you don't want to be exceptional, and are happy to plod along, well, you wouldn't have the issues I'm describing in this post in the first place, and you'd be a rant for another day. But I digress..

The prioritization problem affects people who actively pursue mastery and excellence. The essence of it is this: I have x amount of "free" time, that I need to split a number of ways - family, friends, exercise, and then other reading and learning. This is skewed in various ways for various people, but that's unimportant. The key here, is that you have a limited amount of time that you need to carve up, and each of those slices is fairly finite - thus, you need to prioritize. Not rocket science..

Now, I have an added blessing (or curse, depending on which way you look at it) - I'm interested in a broad variety of rather different and disparate disciplines. I like to think that I have an advanced form of adult ADHD, but afekz says it much more smartly in his bio - "half a polymath". I know that I'm not the only one with this problem either, which whilst comforting, doesn't solve the problem..

Combine the drive to constantly learn more and improve, with diverse interests and the prioritization problem, and you run into general unhappiness. Often this can and does manifest itself in a jaded outlook, burnout, or a mid-life crisis. I'm a little young for those, but figured I'd preempt it anyway :>

With the necessary background out of the way, back to what I'm doing. I'm presently waiting on confirmation of a work visa, but once that is granted, I start a new venture in the US in October. It's going to be really demanding and challenging, but of course that's what I love about it and I'm incredibly excited about it, from many angles. I'll refrain from speaking more about this until said visa is granted however. 

The obvious temptation was to continue working, transition into the new role smoothly, and pick up pretty much where I left off, taking my experience and ideas across and implementing them elsewhere. Coincidentally and ironically, that would also be the worst possible thing I could have done. I believe very strongly in the value of taking a Sagmeister. Though a year would be a bit excessive, I've taken a few months.

In this time, I'm doing a mental reset of sorts, but with some specific goals, and a written plan.

One key area is to fill in some technical gaps I feel that I have, and I've been actively working on this, starting from the ground up to get a thorough understanding. The value of working on this uninterrupted cannot be stated in mere words - but let's leave it at, it has been amazing. My focus is ridiculous without constant mail and phone interruptions, and I can work more in line with my natural schedule (the ZA interwebs are blazingly fast between 1 and 4am) :>

The other goal I had was to re-think my area of work, and try to weigh in on where the industry is going, but with a fresh perspective. Often, you get mired in the ways, mindset and history of your environment, even if you consciously try to avoid it. Outside of this environment, it has been surprising how quickly the ideas have been flowing, and how much more open and receptive I am to new angles, and new ways of thinking.

You might of course notice that this has the side benefit of helping me to be more competitive in my current industry, and is essential prep work for my upcoming role. Ironic, as that's not what I set out to do in this time, but very welcome nonetheless. 

I've also been refocusing on my physical fitness, which has the upside of bringing me even more creativity. iPod and the running track at the gym combined seem to be an idea generator of note. Of course friends have taken advantage too, and I've been catching up with local friends, which has been great. Though we're in different industries, they've been surprisingly cool in inspiring alternate thought angles and also gen'ing new ideas. With the football world cup here, I've caught some of the spirit and some of the games - the timing was super :>

I'm going to be travelling a little too, firstly to Australia in the near-term to re-acquaint myself with family and friends who are on the verge of forgetting that I exist or writing me off altogether, and then the annual pilgrimage to BlackHat in Vegas, to do some contract training work for my prior employer. I'm looking forward to both, and to seeing some friends in Vegas that I don't get to see as often as I'd like.

I've been looking into some education options as well (formal education). Both are currently in progress, but unfortunately the wheels turn slowly, and one of the options is dependent on said visa. Patience has not been my greatest virtue, but I'm working on it..we shall see where these things go..more about it once it's locked down.

I've also been putting a serious dent in my Amazon wishlist, however as these things go, it seems to have just grown even more. Fortunately I have some long flights coming up to dedicate to this again :> This is happy time for me anyway, and the Kindle makes life almost idyllic..

Finally, I've been digging into two of the other main areas that interest me. This has been incredibly fulfilling, and has led to great, albeit unexpected insights into the future. Again, ironically, digging into one area has opened a wealth of options career-wise, and digging into the other area has led me into some detailed research within my own field, as it intersects with this field of interest. Twisted sense of humor you have there, Universe..

I've been very fortunate to receive numerous work-related offers locally and internationally on announcing that I'd left my employer. This has been really humbling and flattering, and I honestly thank everybody that has reached out to me from the very bottom of my heart.  I'm locked and loaded for my new role, but many exciting opportunities crossed my path and it's a wonderful indication of what's out there - we're in exciting times!

I headed into this period with a lot of trepidation, not knowing whether I'd made the right decision. I can unequivocally say that this has easily been the best choice that I've made. I can't help but refer back to Dan Pink's three pillars of motivation - autonomy, mastery and purpose. The combination of these things leads to a powerful self-drive that I've believed in before, but am only realizing the full extent of now.

It should come as no great surprise that I'm actually *busier* now than I was when I was working full-time, so I'm going to get back to it for now.. :>

/nick

*tap* *tap* *tap*..is this thing on..?

Wow, I haven't visited these warm welcoming pages in a *way* long time..I suspect not since I last worked on this trusty old Macbook Pro..nostalgia++


I aim to correct that, and though I'll likely be most active on the Twitters I'm going to make much more of an effort at regularly blogging again on a range of topics, from InfoSec to trading, to all sorts, as per the title of my blog :> 


But, I'm also going to focus on other issues - leadership, culture, performance, psychology, geek stuff, and perhaps a few surprises here and there..


This will now be my new soapbox as my old blogging home is no longer mine..


Speaking of which, I'll post in the near term on my reasons for funemployment, and what I'm actually going to be doing (no, not moving back home to my parents to eat cereal all day and watch daytime TV)..as many people have been asking..


For now, stay tuned :>
/nick

Everybody gets what they want...

The title of my post is a snippet borrowed from a quote by Ed Seykota - Ed is a legendary trend-following trader and is credited with developing one of the first computerized trading systems.

Ed has been featured in a number of publications, has generated phenomenal (to say the very least) returns through his trading and mentors a whole lot of successful traders, among other things. Ed is awesome. Read Jack Schwager's Market Wizards for more on Ed if you're interested (it's well worth it). Many, including me can only hope to be mentored by someone of Ed's caliber.

Anyway I stole^H^H^H borrowed my title from one of Ed's many insightful (and rather unique) quotes:
"Win or lose, everybody gets what they want out of the market."

Simple...but powerful. Because at the end of the day, everybody does get what they want out of most aspects of life, not just the market...except that we generally don't realize the intricacies of how this came to be. Sometimes we also don't want to acknowledge or accept it either, as Ed also alludes to. But at the end of the day, we sure do get what we want, positive or negative.

I'm not going to go into aspects of psychology, NLP and the like, but let's just say that our entire experience of life is shaped and stems from chain reaction of things that are rooted in our beliefs. Your mind filters inputs based on either corroborating and supporting something you'd like to happen to make you feel good, or protecting you from something that would hurt and make you feel bad. There are many books that attest to this, and many examples I can give of basic principles, but I won't. Suffice to say...the map is not the terrain.

Anyway, I got what I wanted this week. Of late, work has been a little quiet. I'm a 0 or 100 person. No middle-ground. If it's not 100, it may as well be 0. So, quiet doesn't work for me - not in the slightest. I found myself grumpy because I felt like I wasn't doing anything useful and this of course led to a chain reaction where I felt I wasn't particularly productive. Of course, things just got even slower. Then I realized I was getting what I wanted. *bleh*

Needless to say, this week I started trying to do things to create work. Again, with the shift in perspective, I got what I wanted. I'm now in the middle of many, many, many things, and productive as hell, and I love it. I even managed to get myself an apartment on the Upper East Side as part of the mix in between. Life is peachy, as I prep myself to head to Vegas.

Of course, one can start an entire argument about how this applies to trading, and in the same way to hax0ring, and again in the same way to pretty much anything you want to do. Other aspects come into play...but that is beyond the scope of this blog posting (again, many well written volumes exist).

Ok, so I've been quiet lately, I'm sorry. But this is all for now. I think that if one thinks about the theme of this post carefully, a myriad of other thought processes will be spawned. Use it...don't use it...but don't knock it unless you understand it and have tried it.

Thank you, and good night!